wealthiest americans. not one. well that's not balanced. that would be like democrats saying we have to close our deficits without any spending cuts whatsoever. it's all taxes. that's not the position the democrats have taken. that's certainly not the position i have taken. it's wrong to ask the middle class to bear the full burden of deficit reduction. and that's why i will not sign a plan that harms the middle class. so now republicans and congress face a simple choice, are they willing to compromise to protect vital investments in education and healthcare and national security and all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special interest tax loopholes that benefit only the wealthiest americans and biggest corporations? that's the choice.

are you willing to see a bunch of first responders lose their job because you want to protect some special interest tax loophole? are you willing to have teachers laid off or kids not have access to head start? or deeper cuts in student loan programs? just because you want to protect the special tax interest loophole that the vast majority of americans don't benefit from. that's the choice. that's the question. and this is not an abstraction. there are people whose livelihoods are at stake. there are communities that will be impacted in a negative way. i know that sometimes all this squabbling in washington seems very abstract. and in the abstract, people like the idea, you know, there must be some spending we can cut. there must be some waste out there. there absolutely is, but this isn't the right way to do it. so my door is open.

i put cuts and reforms on the table. i am willing to work with anybody to get this job done. none of us will get 100% of what we want. nobody should want these cuts to go through. the last thing our families can afford right now is pain imposed unnecessarily five bipartisan recklessness here in washington. the american people have worked too hard, too long to see the official cause yet another one. it seems like every three months there is some crisis. we have more work to do and to just try to dig ourselves out of these self inflicted wounds. while a plan to reduce our deficit has to be part of our agenda, we also have to remember

deficit reduction alone is not an economic plan. we learned in the 1990s, when bill clinton was president, nothing shrinks the deficit faster than a growing economy that creates middle-class jobs. that should be our driving focus. making america a magnet for good jobs. equipping people with the skills to fill those jobs. making sure that their hard work leads to a decent living. those are the things that we should be pushing people to work on every single day. that is what the american people expect. that is what i am going to work on every day to help deliver. we have a few days. congress can do the right thing. we can advertise just one more washington manufacturing problem that slows our recovery and bring down our deficits in a

balanced responsible way. that is my goal. that is what we do right by these first responders. that is what would do right by america's middle class. that is what i will be working on and fighting for. not just over the next few weeks, but the next few years. thank you very much. connell: the budget cuts that are underway if congress does not act. welcome to "markets now." i am connell mcshane. dagen: i am dagen mcshane. >> no new proposals. this is part of the administration and the president continuing plan to try to put pressure on republicans in congress to come to the table and to try to get them to nicole

under on additional tax returns. they are trying to move the voters so they move congress closer to the position on this. connell: peter, while we have you here, the health insurance stocks have really been taking a big hit. tell us what has been going on there. >> the federal government is proposing a surprise cut of about 5% or so. the hmo version of medicare. about a quarter of all seniors in medicare. medicare advantage cause a little less and usually offers additional benefits like vision care and dental. patients have to stay inside their network.

in theory, that health insurance companies save money in these types of plans. private insurance provides the health coverage to seniors and made they get a reimbursement from the government. it was released on friday by the center for the care and medicaid services. dagen: peter, thank you very much for that. shouldn't we be surprised by these bigger than expected cuts and reimbursements? >> thank you for having me on, dagen. i am surprised people are surprised. when president obama talks about abuse in medicare, somehow he is talking about medicare advantage. the administration should not be

surprised that you have these bigger than expected cuts right here today on the reimbursement. dagen: to kind of look at it a picture, is this an effort by the government, either by the white house, to kind of chip away at even more the private option within medicare? >> i think you are absolutely right. the more there are other choices, the more people -- it has been working. the overall plan has come in significantly under budget. significantly under expectations. some of the allies do not like it. i do not think it is the right way to reform medicare spending.

dagen: do you think, though, that the democrats will ever tackle cutting medicare spending? people are not paying in to medicare as much as they are taking out. how would you go about it? again, the dr. payments keep getting kicked down the road. when will these big picture cuts ever happen? >> look, i think you described it perfectly right. people are taking more out of the system than they are paying in. that is unsustainable. we need to have some long term real reform that will fix the medicare program so that we do not have a $35 trillion unfunded liability. this is a real train wreck coming at us. we need to address the problem. the democrats do not even want to do relatively small fixes.

dagen: chipping away. chipping away. thank you so much. it was great to see you. be well. connell: a new report out. nearly 150 cyber attacks linking many of them to targets in the united states and linking those attacks to one building. one building just on the outskirts of shanghai, china. he was saying we should not be surprised about some of this health care talks. maybe the same applies here. what do we do about it? >> this is just the latest story on these cyber operations. they do not just come from

china. iran is a threat. russia, north korea, there are maybe over 100 countries involved. of course, this is the latest wake-up call to do something about it. the critical thing here is, obviously, private / public information sharing. the government has access. they have tools. they have information that can help protect the private sector. they have to keep the bad guys out of their system. we have hundreds of billions of dollars of intellectual property that is whisked away via the internet every year. we do not even know how big this problem is. you have to work together on this. there are concerns about that. connell: does it change the dynamic at all? does it change the dynamic at

all that this report directly links the taxes to the chinese military? does it make it more and comment upon our military and government to respond? >> well, you know, this is not new news in my view. the chinese government knows what is going on despite the denials by the chinese ministry of foreign affairs. the u.s. government has been bringing this up with the chinese for a long time. it is low risk. it is low cost. it is high return and difficult to track. even getting a location on these

servers, this is a little bit of guesswork involved there. there are real challenges there. the big question is, how do we respond? connell: if you had to give a great to the american public, how ready are we? >> there are so many elements. you have to peel back the onion. you have to talk about things like, you know, the electrical grid and things like that. i would say we are at a c level. guy forbid, it could come to conflict with the chinese could shut out the lights on us here. shut off the power. shut out though, you know, air traffic control system.

connell: thank you. i also want to point out that the ceo of that company preparing the report will be on the next hour of "markets now" with dennis kneale and cheryl casone. dagen: already looking into some stock orders. what does the chief have to say about this? connell: washington's spending problem. entitlement programs like social security at the heart of the debate. we will show you how much this should concern investors. that is all coming up. speaking of investors, what about an investment in oil? gas prices are up 32 days in a row in this country. the oil pretty high as well. we will be right back. ♪ [ shapiro ] at legalzoom, you can take care of virtually

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dagen: quarter past the hour. stocks now and every 15 minutes. lauren has more now. >> there are reports that office depot and office max looking to team up together. they are still smaller than staples. every single share is affected. office depot of 18%. officemax up 26%. this would need to get, if it is true, and i trust regulator approval. back to you. connell: thank you, lauren. lauren simonetti.

it comes less than a week after brookshire hathaway and 3g capital acquired heinz. those deals adding to a month. with that market heating up, oversight seems to follow. author of "bull by the horns." she is joining us now from washington, d.c. the heinz deal, in particular, sheila, got a lot of attention. what about the idea that people are trading before these deals or mergers are announced. >> it is based on insider information and it is illegal. it is kind of a sideshow to what is going on there.

connell: the idea of antitrust, which lauren brought up, is our balance now, in terms of regulation and happily enforced that regulation between concerns of people having too much power? >> we have a lot of liquidity in this system. after infusing this is done with all of this liquidity, and then the government to come and try to like or manage us, that is problematic. if there are antitrust issues, they should try to be involved. we have traditional mechanisms in place. i think, again, a lot of this is

what the government has wanted. connell: i had not thought of that. that is a very interesting point. the government creates this environment in which companies want to get together, want to merge, and you say it is flooded with liquidity. [talking over each other] >> absolutely. they should be fully used. i must say, it is not just the government. it is boards that have to be carefully analyzing this activity. corporations are sitting on a lot of cash. make sure the economics make sense. the boards and their shareholders have a big stake in that. connell: let me ask you one big general question before we let

you go. maybe you can give us an outsiders view. where do you see regulation, generally speaking, and obama term number two? >> in terms of financial reform, we just need to get it done. i think the uncertainty, the regulatory uncertainty hurts the financial sectors. the rules need to get finalized. i think a lot of these rules have been too complicated and too bureaucratic. get them done. let everyone know what the rules are in the system will adapt. that is my hope. what will actually happen, i cannot say. connell: formally the chair of the fdic. as always, thank you for coming on. dagen: the full impact of gas prices on prices.

jeff flock is in chicago. he will report from the windy city. connell: and the numbers game and politics. adapting a business state of mind to try to save a party. we have a lot of data to crunch. dagen: i wonder what counts spell like in chicago. like sandwiches? maybe something like that. here in new york it is feet. connell: currencies today, the euro is at 133.61 to the dollar. we will be right back with jeff flock. ♪ [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business...

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dagen: at the top of that our president obama telling the nation that the budget cuts that are less than a week away will cost people their jobs. a little bit of a scare tactic. how concerned should we be if these sequestration cuts to kick in? >> well, we built that into our forecasts. frankly, not all 80 or

90 billion. it will cost some people some jobs, just the uncertainty. i am concerned, i do not think it would be fatal. the economy will grow this year. we will see that job growth in the private sector. if the full sequestration goes in, it could well cost 50 to 100,000 jobs. dagen: negative growth in our economy in the fourth quarter. is now the time to start cutting, in your view? >> the first thing is, yes, we had negative growth.

we had a decline. it will get revised to a small increase. it still was a nearly flat quarter for the economy. most other economists and myself feel like it understated the economy's momentum. the spending cuts are necessary. i hope we get at least half. maybe not all of the sequestration. when you take the tax hikes that we got and if you have full sequestration, it was still almost two dollars for every tax hike. almost the opposite of what sam symbols wanted. dagen: they are back on the parade route. i think it is therefore the

attempt to do this. what do you make of the new proposal? do you think that it has any momentum whatsoever? >> i do not think it has much momentum. i like the proposal. they want $600 billion in tax revenue hikes. the number is lower because we have had tax hikes and some spending cuts, depending on how much goes through the sequestration. i am glad to see them out there. they are still leading the parade. they just do not have a lot of followers. dagen: they are out there on their own. [ laughter ] dagen: thank you, stuart. i looked over and there they

are. they are making their rounds. thank you very much. connell: nobody behind them. that is sad. higher gas prices leaving consumers with less money to spend elsewhere. dagen: selling drones to our allies. we will take you live to the pentagon. take a look at some of those stock plays in that sector today. drone stalks. ♪

dagen: every 15 minutes, we try. stocks now. >> it is the highest level ever. we will bring you straight to the board. it is up 6%. volume is pretty good. the s&p 500 is up for seven weeks in a row. we have only seen that happened 22 times. as we are right now at 1527, we are 49 points from our highest level ever in history for the broader market. connell: thank you very much, lauren. the republican party looking for essentially a bigger business model.

ideas on how to put it together. >> you set the bar very high. connell: this is about youth voters. the president basically dominated the youth vote. voters under 30. we will talk in a moment about how he fixes that. you have three specific ideas. this is a problem that a lot of people have set up. the republican party was kind of outdated, the money ball era of politics are here. you have three ideas. understand how media consumption has changed. >> for young people, they are not watching the 32nd tv spots. they are watching tv online. they are watching their tv shows after the fact.

they are seeing ads pop up then. they considered the daily show to be a news source. connell: you have gone out and tested this. how did the republicans respond to that? >> you have to be there. you cannot have a if you build it, they will come mentality. my second point is about having solutions and a message that is compelling so you believe that republicans will solve the problems that matter to you. connell: talking about solving problems. people are angry. >> they are. i did some focus groups that were mentioned. i was asking young people how they felt about different policies. they said our national debt is way out of control.

i asked why they didn't vote for republicans. they didn't think that they would help to get a job and pay student loans. connell: i will put you on the spot right now. the president just spoke about this. let me play a little piece. maybe you can tell us how the republicans, if they are using newer model, should respond. here is the president. >> the idea that the republicans have proposed as nothing of the wealthiest or biggest corporations. the burden is all on first responders or seniors or middle-class families. they double down, in fact, on the harsh, harmful things i have described. so far, at least what they have

expressed, is a preference where they would rather have these cuts go into effect they enclose a single tax loophole for the wealthiest americans. connell: that is pretty effective politics. >> i think republicans can have an opportunity to come back and say it is time to cut spending now. i think that the issues of spending that that is a huge area where republicans and young voters, there is real synergy there. connell: we showed that graphic at the beginning. they have to get some of these social issues out of the way. >> exactly. rather than just saying, well, that will be a dealbreaker issue, republicans need to present something. have an economic plan that is so compelling and so powerful that

all those other things just do not matter. truth be told, romney did not make social issues a main part of his campaign. for young voters, they felt that was a forefront. connell: we will talk to you more. you are using the data on this. thank you for coming on. dagen: $3.75. that is the price of a regular gallon of gas. where did that come from? it is up $0.44 from just a month ago. connell: jeff flock is in chicago with this story. jeff: standing by where it is nice and warm. 16 degrees, by the way. take a look at the numbers. as you point out, they dollars $0.74.

just a week ago it was $3.60. it is about capacity and the ability to get gasoline to places it needs to go. if we start to get somewhere around four dollars, we start to do real damage. this is money people do not have elsewhere to put into the economy. for months, chicago has the highest prices in the nation. now, it is california. l.a. is $4.28. orange county is $4.26. it is a problem because this is a month in the year where we have the smallest amount of

demand. pardon me, my tongue is freezing out here. a lot of the refiners did not prepare for this. what you see is that i'll fall here. companies like fedex and ups, same type of problem. connell: you do look cold. jeff: thank you. i am glad. i would hate to not look cold. dagen: concerned about your health? now you can check out your own vitals at a self-serve kiosk. we will tell you where you can find them. connell: then, selling drones to our arab allies. one contractor has done just that. should we be concerned? we will be talking about that coming up on markets now. there is a 2% yield on the ten

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connell: here we are. dagen: i missed you. i have been wanting to give you a big hug all hours. [ laughter ] dagen: just to make you uncomfortable. connell: we know about politics and our relationship is kind of tough. we are also finding out that tech tactics are getting just as nasty. dagen: microsoft have taken off their gloves. shibani joshi can tell us all about it. shibani: a lot to get to. the presidential election may be well behind us. silicon valley taking a page out of a political playbook and launching a new series of 30 ads, one might say, to take on the increasingly competitive landscape. this time it is microsoft. you may have seen this if you were up watching "saturday night

live" this weekend. it feels very much like a political ad that we saw back in the fall of last year. this series is based on a survey that microsoft did on e-mail privacy and the statistics that they are using, well, they are true. they are fax. it found 70% of americans did not believe or know that their e-mail service providers, including gmail, scanned their e-mails to deliver ads. instead microsoft using this campaign. outlook.com just got released today. new features. a whole host of features. those hotmail users out there have another reason to upgrade to outlook.com and get away from gmail using these advertising tactics. pretty interesting, i think.

microsoft is getting a little savvy there. connell: not bad. especially out of microsoft. shibani, thank you very much. dagen: stocks now. >> it was just five years ago that google hits $700. now we see that next milestone. this is a ringing endorsement of them. google investors definitely having a nice day. disney also hitting a record high today. jpmorgan, as well as, general electric are at annual highs. also, netflix. back to you. connell: sizzling stocks. we will take it. lauren, thank you. if you need a general check up,

you can now do it yourself at walmart. there has to be a joke in there, right? it will allow consumers to monitor things like your weight, blood pressure and eyesight. with the rising cost of healthcare, companies backing the idea. this comes as health insurance companies are now offering names like web consultations with doctors. that comes to us from usa today. i have seen a lot worse. dagen: i am sure you have. [talking over each other] dagen: just zipping it. connell: thank you. it is called censorship. dagen: the latest in military technology. u.s. drones are now being sold to arab allies. connell: we will also take a

look at some of the winners today over at the nasdaq. staples, facebook. all right. we will be right back. ♪ all stations come over to mission a foa final go. this is for real this time. step seven point two one two. rify a lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

dagen: emirates has reportedly signed a deal with a u.s. contractor to purchase $200 million worth of unarmed predator drones. connell: this is a big story because it is the first time we have sold to a middle east country. >> that is correct. they have been asking for some time for this technology.

the u.s. had resisted up until this point. i must say that the pentagon and state department are not confirming the sale at this time. what we do know, is that the deal was signed. it was part of a larger $1.4 billion deal to buy weapons from the united states that include these 20 or predator drones made by atomic aeronautical systems. "an updated version of the flagship editor offers improved intelligent, surveillance and reconnaissance capabilities." this appears to be what we are seeing right now in terms of the report.

dagen: can't we be sure that these drones are unarmed? >> well, according to general atomics, they will be reconfigured in a way that they will be unarmed. however, we cannot be sure. from those that we have talked to, it is not very difficult to put something onto the predator that allows them to put missiles on them. the reason this is significant right now is, of course, tensions are heating up with iran and saudia arabia. what we are told is these predators, unarmed in the beginning, will be used to keep an eye on iran. connell: that is a big crossover story. potentially, a big business story on the other side of it. thank you very much. dagen: bank of america merrill lynch strategist getting cautious. connell: here with us now is sandra smith.

sandra: some slight gains in the stock market today. everyone is wondering if this rally will continue. year to date gains, dow and s&p each of 7%. the nasdaq has not really been participating in the stock market rally. it is up 6% year to date. the russell 2000 is up 9% so far this year. it is a pretty hefty rally. the dow is definitely taken a breather over the last couple of weeks. analysts coming out and saying it is still time to practice caution, as far as the stock market is concerned. just hold on. because of investor optimism, they are projecting that not only the dow, but the s&p and nasdaq, over the next three to six month, this is where you

want to be over any other asset class. everyone thinks with oil near the triple digits that that has been the big winner. not really. oil is now only 4%. they also favor stocks over being in gold. it is now down 4% year to date. just above $1600. back to you guys. connell: dagen always a fan of gold. thank you for that, sandra. dagen: still waiting for the birthday gift. connell: this other big story. the chinese army has been linked to widespread hacking. a lot of people talking about this today. it involves the military. markets now next hour with dennis and cheryl.

dagen: talking about new numbers. cheryl and dennis have that interview. ♪ >> announcer: you never know when, but thieves can steal your identity and turn your life upside down. >> hi. >> hi.

you know, i can save you 15% today if you open up a charge card account with us. >> you just read my mind. >> announcer: just one little piece of information and they can open bogus accounts, stealing your credit, your money and ruining youreputation. that's why you need lifelock to relentlessly protect what matters most... [beeping...] helping stop crooks before your identity is attacked. and now you can have t most comprehensive identity theft protection availableoday... lifelock ultimate. so for protection you just can't get anywhere else, get lifelock ultimate. >> i didn't know how serious identity theft was until i lost my credit and eventual i lost my home. >> announcer: credit monitoring is not enough, because it tells you after the fact, sometimes as much as 30 days later. with lifelock, as soon as our network spots a threat to your identity, you'll get a proactive risk alert, protecting you before you become a victim. >> identity theft was a huge, huge problem for me and it's gone away because of lifelock.

>> announcer: while no one can stop all identity theft, if criminals do steal your information, lifelock will help fix it, with our $1 million service guarantee. don't wait until you become the xt victim. you have so much to protect and nothing to lose when you call lifelock now to get two full months of identity theft protection risk free. that's right, 60 days risk-free. use promo code: gethelp. if you're not completely satisfied, notify lifelock and you won't pay a cent. order now and also g this shredder to keep your documents out of the wrong hands-- a $29 dollar value, free. call the number on your screen or go to lifelock.com to try lifelock protection risk free for a full 60 days. use promo code: gethelp. plus get this document shredder free-- but only if you act right now. call the number on your screen now!

>> it is high noon. ion dennis kneale. gerri: i am cheryl casone. it could be a prescription for disaster, health-insurance stocks pared today on a government plan for lower medicare raise. an analyst at says these companies can survive it. will explain. dennis: china's army linked to widespread hacking of u.s. businesses, all-american power grids, federal agencies, we have got them, the seat of the hacker tracker firm poised to view the chinese army as the world's most dangerous hacker theft coming put in half an hour. cheryl: builder confidence below expectations today, slipping for the month of february has builders express concern about higher cost of materials and

had. ceo jerry howard is here for exclusive interview. dennis: stocks every 15 minutes and lauren simonetti on the floor of the stock exchange, dow higher, google over 800 for the first time. >> quite a milestone and the dow industrials are 160 points away from the highest level in history, the s&p 50 points away from its a milestone, we do have the market on fire, google shares up 1% at $8.03, the highest level we ever saw for google. this has expressed strength and confidence in internet search and moving into the hardware status as well. larry page, co-founder of google has been c l a and google stock has certainly been on fire up 35% so in many ways this milestone of $800 is because of mr. page.

>> the fear index stayed near its lowest point in a year and the s&p is closer and closer to its all-time high. the fear finally stated from the market. investors letting their guard down too easily. christopher, ward mccarthy, chief financial economist joining us. chris, big story in the wall street journal, the fear is gone. i have been watching the men. and that be a good thing? >> it should be but imagine you are on the beach, partly cloudy and sunshine coming through but you see storm clouds on the horizon. the question is how long can you enjoy the sunshine before the clouds come can you get struck by lightning? that is where we are today. wheat to to be looking towards more risk control as opposed to getting too much fun in the sun. dennis: every time stocks get to a high everyone gets afraid. they want to move back. gazelles rather than boules,

economically when you look at the global and u.s. economy, do you see much reason for the fear to be gone? >> the market is is disengage from the global economy in my opinion. for couple reasons and basically both related to q e which is an ongoing phenomenon and one of the effects of q e is businesses squeeze out yields and the fixed-income market sell as a consequence investors who want to get some yield and some return on investments have to turn to equities and when you are at the highs, the decision to continue to belong and even with the market at highs continues to be the same trade. dennis: let's remember even if we get from 14,030 wetted dollars to 14,160, the high in october of 2007 earnings were up significantly higher than they were in 2007. stocks were getting where they were supposed to be a long time

ago. >> that is true, valuations are not expensive right now. the question is the and not cheap either so how much contraction can you have if we haven't been out of europe or heaven forbid the federal reserve decided turn off the spigot so to speak. if we start to see that occur we think there's a significant pullback that could happen. the biggest thing is profit margin. profit margins don't have room to expand and that is where there could be potentially some pain. dennis: the already so good. how imminent if pullback do we have? will not hit the all-time high of 14,160? >> very hard to say. i would sit there is a good chance because momentum like to follow momentum. as you go higher the prudent thing to do is start reducing positions, not be greedy but reduce your risk profile to whether if the pull back does come you have some power drying and the king traders talking

about it, it is the and have cash. dennis: you the economy. you talk about a path to prosperity with four keys to getting through washington. tell us about it. >> the first is the fed continues to be very accommodating. that will last through the year. will it be a different situation a year from now? we also have a housing recovery that is sustainable and has been very gradual which means i think it should have a long duration. the energy story in the u.s. is not over. i think it is just beginning to blossom and that is going to help the energy sector and a variety of other sectors including manufacturing because we are the low-cost producers and that is going to be part of the story as to why u.s. manufacturing is on the rebound. both cyclically land on a secular basis. dennis: thank you very much. neither one of you have convinced me to sell.

thanks,. cheryy: health care provider stocks have taken a big hit following a new report out of a government agency proposing lowering medicare rates next year. dennis: peter barnes joins us from the beltway with those details. peter: the federal government is proposing a cut of 5% or so in payments to insurance companies that offer medicare advantage, a popular in tempo style version of medicare, about a quarter of all seniors are in medicare, fifteen million enrolled in medicare advantage instead of regular medicare, medicare advantage costs a little bit less than usually offers additional benefits like vision care and dental, but patients have to stay in their network which helps insurance companies save money with these plans in theory. private insurers provide the health coverage, seniors are reimbursed by the government, the proposed cuts in reimbursement was friday by the center for medicare and medicaid

services, 45 day comment period and if ultimately approved would take effect for fiscal 2014. cheryl: there could be 45 days, we might have a glimmer of hope in this, peter barnes live from washington and for more on this report let's bring in steve phil mickelson managing director at healthcare service analyst thomas carroll. 45 days of comments when the companies can come back and tell the government wait a minute, here is where many analysts point the finger, in the report they say we pretty plans are facing several legislatively made changes. this can represent challenges the company comes back to the government and lobbied once again to make some changes, correct? >> absolutely correct. thanks for having me on. there are number of underwriting levers the industry can pull in order to take the point the government is giving us, work that through their benefit plan

designs, as well as the supply side of the business, contracts to doctors and hospitals to offset the potential cuts we are seeing and the spirit of your question is during this 45 day period of time the industry comes back to the government and i suppose someone of a negotiating period when things can get changed so we do see a rate cut going into next year, probably closer to 3% side of the equation as opposed to 5% or 6%. cheryl: can't help but ask the question is this one of the perils of being a government sponsored business? humana is the one that seems most vulnerable, they have put many other eggs in the basket when it comes to medicare advantage. one of your colleagues at s&p cutting his rating from a strong buy to buy on the stock. how you feeling? do you think you're going to maintain your reading on humana? >> i don't see any reason to

change our opinion. humana is one of the best operators in the business. they get their best revenue and earnings from medicare, but that is the business they are in and this is an annual event that we have got on friday, the 45 day notice. we have seen it in the past and we will see it again and it is instructive to look at the 2009, 45 days notice when the industry was hit with an unexpected 4.5% rate capped that shook the stocks quite a bit in the weeks after it came out. humanactually grew its ebitda margin in the case of that cut and it is in worse without the advantage program and the companies that operate within it are so much more sophisticated today than they were a decade ago. head wind nonetheless, but we are very positive on this mission. cheryl: basically buying the weakness and not just humana but united health and universal and well point, these companies also

affected by this change, but when the affordable heelth care act was passed these companies were dealt a similar blow of lower-level blow when it to him to medicare patients and the reimbursements so you eco that to a similar situation. >> certainly back to when the affordable care act was written we saw some changes not just across medicare but basically all health services. what we are seeing here that the show out friday is much more of a routine release from the government and dms. it happens every year and is part of the process and part of the pain and in this case of being an investor in health care. cheryl: one thing you point out in your research which you issued this morning was a legislative issues can be the unknown factor in all of this. what congress can or cannot act to regulate the industry. how concerned are you about that? >> it is always a concern. one of the overhangs that impact

the health care universe kind of all the time. and we look to try to minimize those things and keep our eyes looking forward and to see what is on the orion, you never know. all you can do is when stocks are under pressure, right now we are seeing the government throw a lot at the industry. the market is speaking out. that is when you step up and buy good companies like humana nine times all day. gerri: someone trends 65 every 13 seconds of mia getting older and we need health care. thank you very much. appreciate your time today. >> my pleasure. dennis: gasoline prices through the roof and phil flynn is live at the cme on whether any relief is in sight. cheryl: the downturn in home builder sentiment, an exclusive indian coming up with the ceo of the national association of home builders on what happened. dennis: the economy is down but liquor sales are up.

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dennis: 15 past the hour stocks are hopping, team coverage. cheryl: phil flynn in the trading pits of the cme. and a look at how much further the stock market has to go. charles payne showing us how to make money, first to lauren simonetti whether the dow is again pushing above the 14,000 level but i got to tell you not to be negative, king being stock, it is frustrating. >> the s&p has been stuck at

$15.26 and $15.27 all day, we are trading in tight range today but we have green arrows across the board and its themes we are continuing that seven week winning streak for the broader market, that has only happened 22 times since 1928 so certainly helping out a little bit, these gains we are feeling. more acquisitions in 2013 did the dow jones in the red running out, the biggest gainers on the dow had a banks, bank of america and general electric. now to fill flynn at the cme. >> maybe there are signs the longest streak up in gasoline prices in two years coming to an end. futures are down $0.02, they can go down, i know you can't believe that when you felt the gas tank but you are seeing that. not only are we seeing a break, we're seeing a break and all the oil product weathered its crude

or whatever. also markets around different areas of the country, starting to see them break a little bit. that is a good sign, even scattered reports, prices are going down, not up. that doesn't mean they won't go down a lot but at least the run up we have seen a after day, 32 days in a row is coming to an end. sandra smith had good news. sandra: as we look at major averages on the floor of the dow, nasdaq and s&p all higher today, and really range on as they have in the past, investors trying to decide what is next for these markets that have been on quite a role so far this year speaking of which here is the year to date game, dow, as an be up 7% so far in 2014, nasdaq a 6%, the russell 2,000 small-cap stocks up 9% so far this year but because of those hefty gains, how we got there, so far

so fast, bank of america, merrill lynch analyst, when it comes to the stock market and next three to six weeks they are urging caution. when you look at the dow the next three to six months, they are very optimistic. they like corporate profits and investor optimism and they are very optimistic despite a earlier gains this year that this rally will eventually continue in the near-term. they think we could see this markets putter out a bit. dennis: i am a fan of optimism. thank you earn much. cheryl: dennis did not want the last comment. time to make money with charles payne, stocks in the technology sector, superprofits for computers. we still have supercomputers. charles: it was a hot stock, started the company in 72, brought out of bankruptcy, still amazing. absolutely amazing what is going on. the company then back here, reported record revenue, record operating income for the last

year, they have a new supercomputer, the x c 30 is scales of able to 100 pet of blocks. do you know how amazing that is? the fastest computer in the world is 20 and a couple years from now on will have to call my hand in that video game machine. gray is up 40% in three month and apple is 20%. how come i should by cray? charles: craig is undervalued. is one of these names everyone sort of said they are a has been. a lot of people don't realize the demand for supercomputers run world. we are in an armed raise with china and around the world. as soon as they came up computer they got contracts in sweden, australia, finland, kyoto, germany, all-around world. amazing what these things can do. it will be slow year from now. this new computer is amazing. i am looking at 30% on this.

cheryl: home builder confidence slipping in the month of february. coming up, jerry howard joins us for an exclusive interview with the reason it struck. dennis: done and how you say that so fast. china hacking into u.s. business and we have the anti hacker who is hundreds of attacks to the doorstep of the people's liberation army. cheryl: as we go to break take a look at the world currency, speaking of international story. here's how the world currencies are faring against the u.s. dollar. we will be right back. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading.

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>> 23 minutes past the hour your fox news minute. president obama is pushing congress to avoid the fourth spending cuts that are set to begin march 1st. >> these cuts are not smart. they're not fair. they will hurt our economy. they will add hundreds of thousands of americans to the unemployment rolls. this is not an abstraction. people will lose their jobs. >> president obama urged congress to act saying we have a few days to, quote, avert one more washington manufacturer problem. the international olympic

committee is planning to drop regulating in 2020 but two unlikely allies, iran and the u.s. are finding that decision. iran considers wrestling its national sport and sent a protest letter to the ioc. the coach called the sport and important ambassador between the countries. north korea is threatening south korea with final destruction and warned it could take additional steps after last week's nuclear test. the tough talk came during a debate at the united nations government conference. those are your headlines. back to cheryl casone. cheryl: speculating. builder confidence slipping for the month of february. expectation was it was supposed to go higher. national association of homeless lease their index this morning. it is moving closer to that 2006 level but still not over 50, that is the critical mid point of this index. joining me the ceo and president, jerry howard. the last couple months i have

been asking if we would go over the 50 mark, down a point for the month of february. whar builders telling you? >> basic trepidation is over government policies. the president touched on it in his state of the union speech. i guess he has been watching the last couple months because he said creditors unduly tight and the lack of finality and financial service regulations are having people take pause and that is reflected in this month's numbers. cheryl: if you look at the regions we are showing after the northeast, the west, there was actually a jump in those regions, midwest, that is the opposite of the trend we have been seeing, do you think that is overall a positive move to see those beaten down regions build a little bit? >> absolutely. shows that the economy is in the northeast and particular the in the west and california are really showing signs of taking hold and looking to a strong spring season. in the south where kings are down this month, again, we think

some of it is a recovery from last month. if you look at last month's numbers, stocks were higher than average or higher than expected so somewhat in recovery mode. overall down by one point. i am saying we are going to break 50 sometime soon in the future. cheryl: got to stay with me. you never do. blowing mindless and with you. i will say -- the report -- the builders use survey were talking about material costs, one of the things they are concerned about, higher material costs in particular that in the lumber, copper, a range of issues. how worried are you? how worried are the builders about what these commodity prices going higher and that affecting the bottom line when they are just recovering? >> we are very concerned, exactly right. right now it is predominantly lumber where we are seeing concerns being expressed by the builders, the limitations on domestic harvest of timber, some of the negotiations with foreign

countries about duties on imported lumber, have the bill is a little bit skittish on that front but so do the other regulations out there, the government has and slow to put in place financial service regulations that would help us, some of the regulations that add to the cost of building and coming out in rapid-fire and that is also causing builders to take a pause. cheryl: this sector was gangbusters in 2012. you look at pulte and leonard and told brothers, these stocks were the shining stars of 2012. you talked to the ceos, private conversations. do they express concern about share price, performance in the market? >> just like you learned about me saying we will go over 50 in a couple months, and learns to respect this question and i got to add to the same way, i can't divulge any private conversations on that. cheryl: can i call you and ask the same question later?

>> sure. cheryl: thank you very much. we will talk to you next month. dennis: the chinese army charged with acting in to u.s. businesses and power grids and we will hear from the main accuser up next. cheryl: it is a website that connects two million teachers. is it the next social network? will it go public? dennis: look at the s&p winners and losers. it's a new day.

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let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. >> i am lauren simonetti on the floor of the new york stock exchange.

stocks every 15 minutes. we are talking about best buy. getting a pair of upgrades today. one of them out barclays. stabilizing sales, cost cutting being good for the company. as the guys know, starting march 3, best buy will try to start countering. dennis: make you very much, lauren. the chinese army charged with hacking. the hacks have been traced back to a people army building in shanghai. the charges come from a report from cyber security firms. we have the founder and chief executive. thank you for being with us. you have tracked, i believe, since 2000, 140 different actual

victims call corporate victims and government victims. >> that is exactly right. we did an investigation into over 100, well, actually 1000 trojans and companies. simultaneous to that, we were looking into publicly available documents. they were hiring hackers who spoke english. as we trace thousands of attacks back to ip addresses right in the same region, we look at the mission of the unit, the amount of computers being used out of this region and the fact that the sustained effort for seven years using thousands of

computers led us to a conclusion that is unavoidable. dennis: it is not like they need to steal stuff from the u.s. what is the real intent of these break-ins. if the chinese army testing for vulnerabilities now if they want to go to war with the u.s. someday? >> i have seen thousands of intrusions that are being done from china or the chinese army. right now, to steal our intellectual property, to steal how we manage businesses and to steal things that are involved in mergers. i have not seen evidence of destructive activity. we are losing the confidentiality of our data, but we are not losing the integrity of our data just yet. dennis: well, that is good. do the victims of these reagans,

do they even know it? >> well, they do know it now. a government agency will tell them, you have been compromised. it is coming from china. here is the evidence. the government the united states has been the early warning. i would say there are thousands of aware organizations that have been compromised out of china that are now starting to work together to start addressing these problems. dennis: facebook just fell victim. the chinese government says you guys hack into our stuff all the time. >> whether it is true or not, i consider it and asymmetrical

battlefield. the reason why is that innovation is here. people rely on it. it is an unfair fight. we really do not gain much if we were hacking over there. other than what i call attribution. we are only trying to find our data. if they are hacking us, they actually get data. dennis: the next terrorist attack will be on the electoral power grid. a decade later, it is largely still the same. it is kind of bad that this was able to occur. >> i just think we are more aware. i have seen much greater safeguards. we are not getting worse at it. we are actually getting better at it as a country. we got good enough not to say, hey, look, we have a problem. we were not even good enough to be aware that we were being

compromised. dennis: thank you very much for being with us. great reporting, sir. cheryl: it certainly was. we will have details about boeing coming up. dennis: it could be the next social network to go public. we will speak to the ceo that has a site that links teachers. cheryl: we will be right back. ♪ [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪

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>> im shibani joshi with their fox business. last week a different judge approved transitions with the federal government. meanwhile, bp is preparing for the federal civil trial on the deep horizon water accident set to begin on february 25. this after failing to reach a settlement in the case. macy's and jcpenney's battle over partnership with martha stuart. it is heading to a new york courtroom this week. they are both listed as possible

witnesses. that is the latest from the fox business network. giving you the power to prosper. ♪

dennis: it has become a sort of linkedin for teachers. it is a privately held website that connects more than 2 million teachers worldwide. many signing off as paying members. it is like a century-old, based in the uk. we have the ceo with us now. thank you for being with us, louise. you have been doing this around the world and back in december, you come into the u.s. how many teachers have signed up? >> we now have 200,000 teachers in the u.s. it lets them say share

resources. they put it on a platform and they can download it. teachers are sharing it not just in the states, but across the world. dennis: you have kind of an unexpected partner in this "share my lesson" venture. how did that come about and do they get any kind of financial cut in this? >> it is a proper 5050 joint venturer. i was the only person who ran her up. we talked for a while. she said that teachers in the u.s. really needed the service. we decided to do it together. she is our best partner. dennis: they actually have 50% ownership? >> absolutely.

dennis: you let these teachers, on free of charge. how do you make money? >> we are a very profitable business back in the uk. this network is allowing us to really look at products that teachers really need. we have some premium resources out there. very low value in terms of cost for teachers. we are building tools. they are very responsive. dennis: 2 million heads are certainly better than one. if you look at the whole linkedin, facebook space, they are valued at maybe $68 per user. then linkedin came and is more professional. will there be verticals? >> i think that is very interesting. if you look at what my teachers

are doing on the network, they are not just connecting with each other. they are sharing the idea of what they do every day. they are sharing real articles about curriculum for the classrooms. it is also in-depth knowledge about how you teach properly and the magic of teaching. dennis: charterhouse, a private equity firm, they like to turn things out in about five years or so. you either need to go public or get bought by somebody. which will happen? >> i think that it will be unlikely that we go public in the next couple of years. it is the biggest proportion in the world. dennis: sounds good. thank you very much for being with us. luis rogers. >> thank you. cheryl: time for your west coast minute. the union representing boeing

engineers is counting ballots today and malcolm could lead to a strike. the workers have rejected several offers from the company. retirement plans amongst others are the issues on the table. boeing has had a rough four weeks. down almost 1%. in nevada, casinos are trying to get governor to exempt them from paying taxes and all the free meals they hand out to all the highrollers. a lawsuit has been filed by boyd gaming at the nevada supreme court. if they prevail, the state will have to pay them back. there are the stocks. the california fishing industry is rebounding after overfishing and conservation efforts led to a catch in recent years.

bigger loads and profits are finally coming to port. more to come for 2012. that is your west coast minute. dennis: it is quarter till. we have stocks now. >> and office party. this is one of the reasons the stock market is higher today. they are surging. office depot reportedly combining with office fax. together, those two are still smaller than their chief rival staples. all three of the stocks are to the of right now. a potential merger is actually good for staples. as they try to consolidate, close some stores, to all that cost-cutting, consumers will go to staples. that is why they are getting a price upgrade today. back to you. dennis: thank you, lauren.

cheryl: the second largest company in the world. french conglomerate is looking elsewhere for profit. the cfo is coming up next. dennis: take a look at some of today's winners on the nasdaq. ♪

cheryl: french spirits maker is confirming a full year price

target despite numbers out of europe. they are betting big on the u.s. and, of course, on asia. joining me now is the cfo. >> good afternoon. cheryl: a lot happening in france. obviously, a lot happening with you in the company right now. you are looking at a potential run with makers mark. >> what we said is we are open to acquisitions today. the operations are not for today. we want to remain financially disciplined and we want to remain in company. cheryl: it is careful acquisitions.

the company, the sales are strong. let me ask you this, there are so many brands around the world right now that could be so many great growth opportunities. are you kind of the cautious one of the two? do you come back and say let's be cautious here since we are doing so well. >> i think today, following the bigger conditions, we have some brands in key categories. because of that we are open to this. nothing at this stage. cheryl: emerging markets are strong for you. goldman sachs came out and said

that your guidance, your year over year guidance that was too conservative. how do you respond to that? >> neither conservative or optimistic. just realistic. we grew by 7%. i think that our annual guidance is totally consistent. cheryl: i wonder what it is like to have the french and spanish market. being one of the weaker markets of the country. you are expanding here. you are expanding in asia. >> i think it is too early. western europe is still in a -- context. we have to face some negative technical of sex.

we are strong in the americas. we have global exposure. cheryl: of merging markets 40%, 50%, 60% the next time we talk. great to see you. >> thank you. dennis: media minute time. two new tv shows. how the big four broadcasters are becoming just another cable channel. cbs just canceled a new show after just two episodes. killing lincoln based on the bill o'reilly novel. it got more viewers than much

bigger cbs. twenty-five to 54 years old. sony playstation, playstation four, may be unveiled tomorrow. six years after they set out to revolutionize video games. next version far easier for them to skip the desk and linkup online and play there. dam coders had to write to the metal. they had to start from scratch. that will be not a problem this time. cheryl: tom close off will be joining ashley webster and tracy byrnes. dennis: lou dobbs weighs in on the $2.4 trillion simpson bowles deficit reduction plan.

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